Friday, April 20, 2012

Had a good-bye dinner with Eugenio and several faculty last night. Eugenio put his seven children to work on a production line making a kind of salsa with tomatoes, aji, garlic, olive oil, lemon juice, and cilantro. Everything chopped very fine. Wonderful on bread.
Helped Eugenio make paella, which turned out well. Chicken, sausage, mussels, beef, bacon. Cooked it on the stove and then baked it. Rice was nice and light, all the meats were good. Had a lot of different kinds of red wine, and the saintly Asuncion made a marvelous blueberry dessert. More red wine, coffee, more red wine, cigars. My head felt rather large this morning.

Today the official goodbye luncheon with the distinguished Couyoumdjian Netle family. Went to Le Bistrot, a generically-named but anything but generic restaurant in La Providencia.
To start, we had wine and "Queso de cabeza casero con su salsa ravigote." The "head cheese" is a boiled pig's head that cooks down to an aspic or terrine, with meat pieces, and covered (in this case) with a "sauce ravigote," which is a vinaigrette with sliced eggs, pickles, and spices. An odd dish, but delicious. A bunch of flavors and textures.

We also had a nice snails dish for our other appetizer: Caracoles en salsa de roquefort, champiñones y tocino. The snails were small and quite tender, and of course if you have a sauce of white wine, blue cheese, mushrooms and bacon it's hard to go wrong. Came with hot toast points, and I was sopping up the remants.

Here is a link to my article today in La Tercera. It's in Spanish, but then of course it would be. The English version (a bit longer, because when JP and I translated it we also had to shorten it by about 30%):

If Treated Like Adults, People Act Like Adults
Michael Munger, Department of Economics, and Political Science
Duke University

In the movie "Minority Report," a government agency becomes convinced it can see the future. Using telepathically gifted super-humans, the state tracks down "criminals" who have done nothing wrong.

On March 9, the Chilean government implemented a "zero tolerance" policy on alcohol consumption for drivers. This policy throws a shadow of dread into every restaurant meal, private party, or after-work party. But most of those who will be afraid, and even many of those who will be arrested, will have done nothing wrong.

Nonetheless, we are avid recyclers chez Maison de Mungowitz, I was interested in how (if?) Chileans do it. The reason that question is interesting has to do with basic economics: if recycling saves money and resources, then the first people to recycle would be relatively poor. Poor people can't afford to throw valuable stuff away, right? Whereas rich folks can afford to be profligate. So if recycling saves money, you would expect poor countries to recycle first, and most, yes?

I could not immediately find a source on this, but here is what I did find. First, here are the "top 7 countries" according to the BBC:

On the other hand, Korea apparently recycles 50%, and Japan 40%, with more than 80% of glass being recycled in those countries. Not sure why they didn't make the list, unless they didn't fill out the proper forms to get apparatchiks at BBC to let them into the club.

Lowest recycling rates: Yemen. Pakistan. Basically all of Africa, outside of South Africa, which has a rate of 18%, and climbing.

Now, my mental regression line calculator is flawed, but I'm pretty sure that these rates do NOT indicate that poor countries recycle first, and more. To the contrary, rich countries recycle first. That means, friends, that recycling emphatically does NOT save money. Instead, recycling lets rich people feel good about themselves, and perhaps does some good for the environment, as a public good reducing pollution and use of landfill space. BUT. IT. DOES. NOT. SAVE. MONEY. (Hey, kids, it might be fun to collect the data and do an actual analysis of the relation between recycling rates and wealth! You could even do it just for US states, or cities!) (UPDATE: A commenter notes I naively reversed the causal arrow. Recycling CAUSES economic development. +1, commenter!)

Anyway, Chile (recycling rate 2%, with a goal of 10%) has a program (here is rather sad web site) for recycling. I'm not making this up. You have to drive (!) to the sites, and wait in line, with your car motor running (see line of cars, at least 200 meters long, out into street, at top left):

Here is a woman, with a baby. I watched. She waited in line, more than five minutes, car motor running, for a spot. She got out, put baby in pack. Went to trunk, got out TWO CARDBOARD BOXES, and put them into containter:

And then when one of the vats is full they pull it out:

And then they put all this valuable material on a truck:

So...why? If recycling does not save money, or resources, and in fact is a big net waste of resources....why?

It is worship, of the secular god Gaia, the Earth Mother. Like any sacrifice, it should be costly. It MUST be costly, in fact, to count as a sacrifice. That's not a recycling facility, it's a church. Once you understand that, it all makes sense.

Wednesday, April 18, 2012

European austerity is not causing renewed growth and it may not even be lowering debt ratios. Other than that, I guess it's going pretty well.

It's fun to rail against the dummies who thought austerity would work, but really, what else could the affected countries do? They can't use monetary policy because they don't have a currency and further fiscal expansion would cause the bond vigilantes to draw and quarter them.

Paul Krugman presents a complicated scenario where the ECB creates higher inflation and Germany runs a budget deficit to compensate for the austerity in Spain and Italy.

But Spain and Italy do NOT run the ECB or the German finance ministry!

The only alternative to austerity that the PIIGS have, that they can actually implement is to exit the Euro, devalue like crazy and hope for the best. They are choosing austerity over this step. I truly don't understand why, unemployment in Spain is well over 20% and climbing. It's hard to see how a Euro exit could make things worse.

In the West, we have spent decades getting conservative central bankers to be seen as the only proper type of central bankers, taking the Rogoff solution to the "inflation bias" problem highlighted by Barro & Gordon. But now we pretend to be shocked when these conservative bankers won't produce higher inflation.

Of course they won't, that's why they got the jobs to begin with!! If there was any chance they'd run higher inflation they'd never have been appointed.

Driving back from Chillan to the airport at Concepcion, we encountered a stampede: a LOT of cows, running hard, straight at us. They were hemmed in by the fences on both sides. Eugenio came pretty close, then backed up, and then backed up hard. Those cows would come up on the hood, because there was no room.

By the time I got the camera out, the vaquero had appeared, a big pissed off guy on a big pissed off horse. One vaquero for a LOT of vacas. He managed to get the gate open.

The vacas, who prefer grass and familiar surroundings, were very happy to go through the gate, except for one calf that simply would not go. We left without knowing how that story ended. Mr. Vaquero was almost ready to make some veal, I think, because the calf was not cooperating. Note the big, flat Chilean vaquero hat (chupalla), straight flat brim, very wide.

Oklahoma authorities have arrested Darlene Mayes, alleging that she is the criminal mastermind behind an organization that supplies almost half of the marijuana in Kansas, Oklahoma, Arkansas & Missouri.

Now maybe 40% of the grass in those 4 states isn't very much (Mrs. Angus and I live out here and it's more meth and oxy country than anything else), because all the cops seized was 4 pounds of weed and $276,000 in cash which Ms. Mayes refereed to (probably correctly) as her retirement fund.

Behold the biggest druglord in Oklahoma:

The question foremost in my mind? Is there a prison anywhere that can hold her?

Went down to Chillan, after flying to Concepcion, toward the south of Chile. You can't say "in the south," because the country is so tall. But Chillan is quite a bit south from Santiago.

Got to stay at the winery/home of the in-laws of Eugenio. All the estates there are "Fundo BLANK BLANK," where the blanks are the names of the wife of the estate owner; in the case of Fundo Santa Ana, that was Ana. Amazing to watch the grapes being taken in, and the wine being made. There are VERY few concessions to the 20th century here, except for the use of gasoline powered engines on the tractors and the grinders. Everything else is escuela vieja.

The view of the big house from the vineyard:

The field, with the wagon and boxes of grapes:

A short video of the delivery of the grapes to the grinder. A centrifuge separates the stems, which still have a lot of sugar in them. These are used for compost and animal feed. The noise is the grinder.

The press. This could have been from 1600. Absolutely no mechanization of any kind. Here they are removing the pressed skins, which still have quite a bit of sugar in them, to use for one more pressing and fermentation.

The sunrise, looking out over the vineyards from the big house. Fire on the mountain. Amazing.

Sunday, April 15, 2012

Justin Sandefur and longtime KPC friend Mwangi Kimenyi along with Tessa Bold, Germano Mwabu & Alice Ng’ang’a have written a remarkable paper about the non-uniform results of an educational intervention in Kenya. The paper is well-deserving of discussion, but so is the story of its evolution.

The paper studies an intervention that adds "contract teachers" to schools. Contract teachers are meant to be teachers outside of the main educational bureaucracy who in some way have close ties and more accountability to the local community than the "regular" teachers. In the study, some of the intervention was run by the government, and some was run by an NGO (Worldvision). Test scores in math and reading went up by 0.2 standard deviations compared to the control schools when the intervention was run by the NGO and this increase was statistically significant. However, the intervention had no effect on test scores when it was administered by the government.

This result alone points out the difficulties involved in scaling up education intervention that have been tested by RCTs run by NGOs. Size means government and government might not work.

But people, there is so much more to the story!

The concept of contract teachers initially involved remedial teaching. Banerjee, Cole, Duflo and Linden (QJE 2007) study an NGO-run program in India where the contract teachers tutored remedial students (which raised test scores 0.28 standard deviations). Duflo, Duplass, & Kremer study a contract teacher RCT in Kenya that included the concept of "tracking" where contract teachers were added to a specific class. In some cases the class was randomly split into two groups; in others it was split into low and high scorers on an initial test. This split into more homogeneous classes produced the biggest positive results in the trial.

In an email exchange, Justin told me that while Duflo encouraged him to include a tracking component in his study, she said that it was very unpopular and hard to administer. It is also hard to imagine a government run program that would allow such a component. Think about the USA. What would parents do if they found that classes were being segregated by test scores and their kid was in the "dumb" group?

Because they were explicitly interested in the idea of scaling up a program that could be run by the government, Sandefur et. al. did not include any idea of tracking in their study. In other words, they judged a key element of the success of contract teachers in previous RCTs to be politically unviable ex-ante.

But there's more!

The Sandefur study was part of a pilot program in Kenya. However, things didn't go according to plan:

the Ministry opted to scale-up the contract teacher program before the pilot was completed. Thus the randomized pilot program analyzed here was launched in June 2010, and in October 2010 the Ministry hired 18,000 contract teachers nationwide, nearly equivalent to one per school. These 18,000 teachers were initially hired on two-year, non-renewable contracts, at salary levels of roughly $135 per month, somewhat higher than the highest tier for the pilot phase. In 2011 the Ministry succumbed to political pressure and agreed to allow the contract teachers to unionize and subsequently to hire all 18,000 contract teachers into the civil service at the end of their contracts.

In other words, 18,000 supposed "intervention" teachers became "control" teachers! In plainer terms, they switched from being part of the solution to being part of the problem. Although maybe not, because as Sandefur et. al showed, the government administered contract teachers had no positive impact on outcomes.

In sum, the Sandefur et. al paper shows that while small scale contract teacher RCTs produced modest but positive results, it is not likely those results will survive scaling and government administration.

So what to do? Well Justin & Mwangi along with Tessa Bold and Germano Mwabu have another paper that points to what I believe is the solution at least in the short and medium term. They show that in Kenya, being in a private school raises test scores by one full standard deviation relative to public schools, other relevant factors held constant (this is not an RCT but rather uses "observational" data).

So on the one hand we have these interventions in public schools that raise outcomes by a couple tenths of a standard deviation when implemented on a small scale by NGOs and that may will have no effect when scaled up and implemented by governments.

On the other hand we have an institution (private schools) that raises test scores dramatically more by effectively solving the teacher accountability problems that seem to be behind the outcome problems in public schools in Kenya and other developing countries.

Let me channel Milton Friedman and James Tooley and suggest expanded private schooling with a public voucher program as potentially the greatest pay-off educational intervention available in such situations.